Islamic finance industry to hit $5 trillion by 2016

The global Islamic finance and banking sector is poised for a year-on-year growth rate of 25 per cent, which would see the industry valued at $5 trillion in 2016, said experts ahead of a major financial summit in Abu Dhabi.

The event, International Islamic Finance Conference 2012 will be held from October 14 to 16 at the Park Hyatt Hotel in Abu Dhabi.

According to experts, the Islamic finance and banking industry is pegged at $1 trillion with an estimated growth rate that is four times higher than conventional financial services.

They said that this indicates a need for an increased understanding of both the sector and the robust strategies needed to support such growth where the increased competition is in danger of blurring of lines between products and services.

The event organisers, Emerald Insight said the demand for the Sharia’a-managed industry was largely marketing driven with a noticeably high number of institutions entering the arena introducing new products to market.

They noted that the sector is undergoing a dramatic change with its one-time easily identifiable early entrants of the 70’s increasingly joined by new dedicated players, alongside Sharia’a-specific, specially-branded product offerings from the general banking sector.

One of the region’s leading economists, Dr Henry Azzam is slated to open the major conference. He will be joined by banking and investment specialists for discussing the opportunities and challenges that face the sector, including its regulatory and supervisory set-up.

Dr Azzam, a financial services expert with more than thirty years regional experience, is currently adviser to Deutsche Bank AG and chairman of the board at Nasdaq Dubai.

He will kick-start the three-day event which will also make a special review of the impact of the recent political and socio-economic developments within the region and their likely impact on the global Islamic financial sector, including mutual funds, securities and derivatives, as well as regular banking services.

The other speakers include Prof Fouad Beseiso, former Central Bank Governor and first Governor of the Palestinian Monetry Authority and Dr M. Kabir Hassan, the associate professor and associate chair of the Faculty of Finance, University of New Orleans.